Virgin Mobile’s revenge: British firm seeks to regain ground and double revenues in Chile, Mexico and Colombia

RIO DE JANEIRO, BRAZIL – In December Virgin Mobile announced the centralization of its three operations: Mexico, Colombia, and Chile. The London-based company aims to reduce costs and double its revenues in these markets through a formula that leverages the teams’ strengths in each country.

To achieve its goal, the company has brought two executives on board, Carlos Gómez, who will serve as commercial manager, and Javier Flores, who will be in charge of the technology area.

In 2016, Virgin Mobile had on the order of 360 thousand subscribers, mostly prepaid at its best time in Chile. Its greatest revenue flow came from its alliance with Metro since each station had a branded wifi point where its customers could connect.

Competitive pressure and the Mobile Virtual Network Operators (MVNOs) barriers made it difficult for the business to take off and, in fact, it never exceeded 2% of the national market.

Read also: Check out our coverage on Chile

The social outbreak of October 2019 and then the spread of the coronavirus caused the collapse of its subscriber base. As of September 2021, according to data from the Undersecretariat of Telecommunications (Subtel), 115 thousand contracts were registered.

And the recovery has not been able to advance. On the one hand, the connection points in Metro are off because the cost of installing in the subway network has increased, and passenger traffic has dropped. On the other hand, the prepaid segment in Chile has been declining every quarter.

NEW BETS

For this reason, Virgin’s commercial manager, Carlos Gómez, commented that they would change their sales formula to attract more post-paid subscribers and negotiate new commercial alliances. Now, they are about to sign an agreement with Turbus, with which they will be able to sell their chips throughout the Diez family company’s network.

“We are looking for a business that allows us to have scale. We are looking at opportunities to distribute our services not only with companies that are large retailers but also with smaller firms, but with a presence in several points. That’s where our alliance with Turbus came from. If you buy a ticket, you will have the option of acquiring a chip. If this works for us, we will replicate the model in Colombia”, said Gómez.

In addition, the executive explained that as the market is evolving to post-paid, “we are looking at how to enter the segment, without giving customers the headaches of a contract”. “In the first half of the year, we will launch the commercial strategy, which I prefer not to advance,” he said.

Even though they are defining the initiative, the manager assured that they are looking at how to put together plans with fixed charges; service improvement offers for new and old customers; and enter to serve middle and low-income subscribers who are, in his opinion, those who traditional firms are not serving.

DOUBLING REVENUES

Gómez’s main objective is for Virgin to double its revenues in the three markets through new offers to its subscribers, considering that it has 500,000, Colombia 2 million, and Chile 115,000 customers in Mexico.

“More than doubling the number of users, what we want is to double the company’s size in terms of revenue, and that implies that we have a significant growth in the number of users. I expect that Mexico will be three times Colombia. We are interested in capturing higher-value users through our innovation strategies,” he said.